Advance July 2010 Census data continues to show durable goods new orders are still relatively strong when looking at the unadjusted data.
Because durable goods have seasonal patterns, the only way to look at the unadjusted data is to review the changes YoY – and then look at the preceding months and see how the relationship is changing. Depending on the years used for comparison, you can argue that durable goods are improving – or you can argue durable goods are stable. But there is no downward bias in this data.
As a caution, this is advance data which is an extrapolation of a specific sample.
As you can see the YoY and MoM variance in the unadjusted data, any formula used to seasonally adjust the data would have accuracy issues. The press release uses seasonally adjusted data and states in part:
New orders for manufactured durable goods in July increased $0.6 billion or 0.3 percent to $193.0 billion, the U.S. Census Bureau announced today. This increase followed two consecutive monthly decreases including a 0.1 percent June decrease. Excluding transportation, new orders decreased 3.8 percent. Excluding defense, new orders increased 0.3 percent. Transportation equipment, also up following two consecutive monthly decreases, had the largest increase, $6.1 billion or 13.1 percent to $52.6 billion. This was due to nondefense aircraft and parts, which increased $4.0 billion.
Backlog, both SA and NSA, is continuing to decline. This is a major concern as it is demonstrating there are too many people employed in durable goods manufacture.